Friday Free Read: Will Obamacare help small businesses? The Wall Street Journal weighs in

What happens when you mix a Senior Fellow at one of the foremost political thinktanks with an MIT professor of economics? A Wall Street Journal article, of course.

Michael D Tanner, Senior Fellow at the Cato Institute, and Jonathan Gruber, Professor of Economics at MIT, both weighed in on the Affordable Care Act in an article for the Wall Street Journal this week.  The topic? “Will the health care law help small businesses?”

Gruber took the pro position, arguing that premiums will become more steady and predictable for employees and that their options will expand, as small businesses will have access to the new healthcare exchanges designed to grant the same type of options large group employees have been offered for years.  Gruber goes on to state that his own estimates have small group health care costs rising only slightly, offset by the fact that individual plans are now guaranteed issue (through federal or state based health care exchanges) as well, taking some of the burden off small group healthcare plans.

Tanner offers the alternative side, stressing the economic impact on small business owners.  Because of the mandate to offer group health care for companies of 50 or more(Editor’s note: This provision has been delayed until 2015), Tanner argues that business owners will be reluctant to pass the 49 employee threshold, making it difficult for small businesses to become bigger businesses.  According to his research, this effect has already set in as 41% of small business owners have held off plans to hire new employees, while 11% have already instituted reductions in hours and lay offs to prepare for the upcoming impact of Obamacare on their small businesses.

Both sides offer compelling arguments, and I would encourage you to read the article in its entirety to do each of their arguments proper justice.